TOKYO (Kyodo) -- Japan's industry minister on Friday welcomed the reported move by major car manufacturers Honda Motor Co. and Nissan Motor Co. to begin talks on a merger that would create the world's third-largest automaker group by volume.

"In general, it can be seen as a positive step toward strengthening the competitiveness" of Japan, Yoji Muto told reporters, adding the possible development between the two automakers would be an "effective means of improving corporate value."

Japan's second- and third-largest automakers are considering the possibility of establishing a holding company, sources familiar with the matter said earlier this week, in an apparent bid to form an automobile alliance to rival Tesla Inc. of the United States and Chinese EV makers.